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WEN » Topics » Share-Based Compensation Expense

This excerpt taken from the WEN 10-K filed Mar 1, 2007.

Share-Based Compensation Expense

As disclosed in Note 1, prior to January 2, 2006 the Company accounted for stock options and other share-based compensation in accordance with the intrinsic value method and, accordingly, did not recognize any compensation expense for those stock options granted at exercise prices equal to the fair market value of the common stock at the respective dates of grant. Upon the adoption of SFAS 123(R) effective January 2, 2006, the Company began accounting for share-based compensation based on the fair value of the awards at the date of grant rather than the intrinsic value. See Note 1 for disclosure of the effect of adopting SFAS 123(R) on certain amounts reported in the accompanying consolidated statements of operations and cash flows in 2006 and the pro forma effects on net income (loss) and net income (loss) per share for 2004 and 2005 as if the Company had applied the fair value recognition provisions of SFAS 123.

Total share-based compensation expense and related income tax benefit and minority interests recognized in the Company’s consolidated statements of operations were as follows (in thousands):

 

 

 

 

 

 

 

 

  

2004

  

2005

  

2006

Compensation expense related to stock options other than the Executive Option Replacement

  

 

$

 

246

    

 

$

 

1,177

    

 

$

 

7,500

  

Compensation expense related to the Executive Option Replacement

  

—

  

 

  

16,367

    

—

Compensation expense related to Restricted Shares

  

—

  

 

  

6,051

    

 

  

4,363

  

Compensation expense related to the Equity Interests

  

 

  

224

    

 

  

6,460

    

 

  

4,026

  

 

 

 

 

 

 

 

Compensation expense credited to “Stockholders’ Equity”

  

 

  

470

    

 

  

30,055

    

 

  

15,889

  

Compensation expense related to dividends in 2005 and related interest in both 2005 and 2006 on Restricted Shares (a)

  

—

  

 

  

196

    

 

  

39

  

 

 

 

 

 

 

 

Total share-based compensation expense included in “General and administrative, excluding depreciation and amortization” except for $612,000 in 2005 which is included in “Facilities relocation and corporate restructuring”

  

 

  

470

    

 

  

30,251

    

 

  

15,928

  

Less:

 

 

 

 

 

 

Income tax benefit

  

 

  

(89

)

 

  

 

  

(8,565

)

 

  

 

  

(4,436

)

 

Minority interests

  

 

  

(86

)

 

  

 

  

(241

)

 

  

 

  

(249

)

 

 

 

 

 

 

 

 

Share-based compensation expense, net of related income taxes and minority interests

  

 

$

 

295

    

 

$

 

21,445

    

 

$

 

11,243

  

 

 

 

 

 

 

 

 

 

(a)

  

 

  

Dividends of $191,000 that accrued on the Restricted Shares in 2005 were charged to compensation expense. Upon adoption of SFAS 123(R) effective January 2, 2006, dividends of $551,000 that accrued on the Restricted Shares in 2006 were charged to “Retained earnings.”

133

Triarc Companies, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
December 31, 2006

"Share-Based Compensation Expense" elsewhere:

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